Suzano (NYSE:SUZ) executives highlighted record pulp shipments, ongoing progress in its U.S. paperboard operations, and lower costs during the company’s fourth-quarter 2025 earnings call, while also pointing to a tightening supply-and-demand picture for hardwood pulp heading into 2026.
Record pulp shipments and “resilience” through the cycle
CEO Beto Abreu said Q4 featured record pulp shipment volumes for Suzano, which he attributed to “flawless execution” by the supply chain organization. Abreu also emphasized that cash costs came in “absolutely in line with the plan,” and that the company generated strong operational cash flow and free cash flow despite what he described as a lower price cycle.
Paper and packaging: U.S. stability, Brazil impacted by prices and FX
Fabio (paper and packaging lead) said Suzano’s paper and packaging business delivered strong volumes in Brazil and the U.S. in Q4, helped by paperboard seasonality. He noted continued declines in export paper prices and described international markets as weak, with oversupply and declining demand. In Latin America, demand was described as more resilient than in the U.S. and Europe, though Fabio cited inflows of Asian papers at “very low prices.”
In the U.S., management said Suzano’s packaging business remained a positive highlight with stable pricing quarter-over-quarter and a 21% year-over-year increase (as described on the call). However, the company also pointed to new capacity in the U.S. SBS market pressuring operating rates—particularly in folding box and food service—while liquid packaging board was described as more insulated.
On EBITDA, Fabio said the paper and packaging unit’s performance improved quarter-over-quarter, with a 10% increase driven by the ongoing turnaround at Suzano Packaging in the U.S. He added that EBITDA in Brazil was pressured by lower prices and foreign exchange despite higher volumes, and that annual maintenance downtimes at the Suzano and Limeira mills were completed on time and on budget but increased costs.
Looking to Q1, management expects lower sales volumes due to seasonality, improved pricing as announced increases are phased in across Brazil and export markets, and better Brazilian cash costs due to no planned downtimes. In the U.S. packaging business, prices are expected to remain stable in dollars given that most volumes are under contract, though Fabio warned of potential cost pressure from winter conditions and higher-than-expected natural gas prices.
Fabio also disclosed that Suzano decided in January to cease paper operations at the Rio Verde mill, its only non-integrated paper site. The mill produced about 50,000 tons annually and had the highest cash cost in the portfolio, he said. Management expects a positive impact on 2026 results by relocating production to the more competitive Suzano and Limeira mills and adjusting commercial strategy.
Pulp markets: price recovery, China demand, and supply-side shifts
Leo (pulp business lead) said Q4 was marked by price recovery in all markets, driven by higher hardwood pulp demand in China and Asia. He also cited a pressured wood-cost base in Asia, raising cash costs for regional producers. In China, he said paper and board production rose 17% in Q4/2025 versus Q4/2024 (per SCI), while full-year 2025 production grew 3%, with Ivory board up 8% and tissue up 6%.
Leo said Chinese pulp imports increased by 1.7 million tons in 2025, including 1.4 million tons of hardwood pulp (per Chinese customs statistics). He attributed demand to softwood substitution and textile players increasing purchases of paper-grade pulp. Suzano’s order intake in Q4 was “above expectations,” and he said the company carried delivery backlogs for regions where it invoices directly from Brazil, including China, Southeast Asia, and the Middle East.
The company reported an average realized pulp price of $538 per ton in Q4, which Leo described as backward-looking due to invoicing backlogs; he said market prices were already above that level and that new orders across regions were captured at higher price set points. Suzano sold record volumes in Q4, above production, driving inventories to “very low levels” and pressuring logistics operations. Leo also cited $4.8 billion in EBITDA, up 8% quarter-over-quarter, supported by higher volumes and improved U.S. dollar pricing.
For early 2026, Leo pointed to strong January production data in China and said the increase did not lead to inventory build at paper producers. He also said order intake remained strong in January with full implementation of announced price increases, including in Western markets.
Management identified two supply-side developments that it said improved short- and mid-term pulp price dynamics:
- Indonesia forestry permit revocations covering more than 1 million hectares, in addition to 500,000 hectares revoked in 2025. Leo said a key producer announced an “immediate and unexpected” curtailment of 150,000 tons for February and March combined, and that Indonesia may intensify woodchip purchases—primarily from Vietnam—supporting higher woodchip prices.
- APP’s OKI project delay from early Q2 to mid-Q4/2026. Leo said this had been the only market pulp capacity addition expected in 2026, and that the delay means no incremental market pulp capacity is expected to reach markets during the year.
During Q&A, Leo added that Suzano’s more positive tone versus prior discussions was largely driven by these supply-side changes, and he also discussed APP’s planned startup of a board machine in Indonesia, which management expects will require pulp sourcing while OKI 2 remains delayed.
Leo said Suzano will need to rebuild inventories in Q1 ahead of a maintenance-heavy Q2. He said planned downtime will reduce Q2 output by almost 300,000 tons versus Q2/2025 under the company’s production plan, leading to constrained volumes and “zero allocation” to spot markets for customers purchasing directly from Brazilian ports, including China and other Asian markets, the Middle East, and Africa.
Costs, cash flow, leverage, and shareholder returns
Aires (costs) said Suzano closed Q4 with cash cost of BRL 778 per ton, a 3% reduction versus Q3, driven by lower input costs, greater operational stability, lower prices for energy and chemicals (including natural gas and caustic soda), lower labor costs, and wood benefits from shorter average radius and better quality. He said Q4 represented Suzano’s best cash cost performance since 2021 and that the company expects 2026 average cash production cost of pulp to be broadly in line with Q4/2025, with a more pressured Q1 due to maintenance and then gradual improvement through the year.
Marcos (finance) reported free cash flow of $400 million in Q4/2025, helping reduce net debt to $12.6 billion and lowering leverage to 3.2x in dollar terms. He also said Suzano renewed and upsized its revolving credit facility from $1.3 billion to $1.8 billion with 20 banks while reducing the facility’s cost.
Management said 2025 CAPEX came in line with guidance and that 2026 CAPEX guidance is being reduced by nearly 20% year-over-year. Marcos also detailed a $6.2 billion FX hedge portfolio as of December 2025, using zero-cost collars with a range of BRL 5.83 to BRL 6.73 per U.S. dollar, and discussed potential positive cash adjustments under certain FX scenarios.
On shareholder returns, Marcos said Suzano paid BRL 1.4 billion in dividends (more than 2% dividend yield, per management) and completed its fifth buyback program on February 9, acquiring 15 million shares. The company also announced a new buyback program for up to 40 million shares over the next 18 months.
In Q&A, management reiterated a stated ambition (shared previously at Suzano Day) to reduce net debt to $11 billion and said deleveraging is expected to come primarily from operations rather than divestments, though it may consider selling non-core assets—particularly in forestry—when land has higher value for other uses.
Abreu also said Suzano’s joint venture with Kimberly-Clark is progressing as planned, with an expected closing in mid-2026, and emphasized priorities for 2026 around extracting value from past investments, including ramping returns from the new tissue project in Aracruz, continuing improvements at Pine Bluff, and completing the JV carve-out on time.
About Suzano (NYSE:SUZ)
Suzano SA is a Brazil-based pulp and paper company recognized as one of the world’s leading producers of eucalyptus pulp. The company develops and supplies a wide range of fiber-based products that serve global demand in printing and writing papers, tissue paper, packaging, and specialty paper markets. With an extensive network of industrial units and logistics operations, Suzano manages every stage of production from forest plantations to final delivery, emphasizing integrated operations and quality control.
At the core of Suzano’s business is its sustainable forestry model, which covers more than one million hectares of managed eucalyptus plantations across Brazil.
